I Don't Think a D610 Solved all of Nikon's Problems

(commentary)

Here's a quote from a Nikon dealer:

Nikon has devalued our remaining new [D600] inventory and will make it almost impossible for us to sell it off short of taking big losses. We're already trying to move our current inventory by taking a $100 hit on the profit side and I don't think that's going to be enough. If anyone thinks I'm ordering new D610's today (short of specific order requests) they're nuts. 

So, did the D610 solve Nikon's D600 problems? No, it is likely to generate a new problem, at least in the short term. 

Using Adorama and B&H as examples, the D600 sells for US$1900 with a bit over US$100 of extra stuff thrown in (extra battery, memory card, etc.) plus 4% you can use on a future order. The D610 is US$2000, currently without either of those things. So the "cost" of a D600 at the moment is:

  • Used EX+ condition: US$1479 (KEH)
  • Refurbished: US$1549 (Adorama)
  • New: implied US$1704 (B&H)


A dealer probably paid Nikon between US$1680 and US$1785 for a new D600, depending upon the volume of their order and their terms (cash gets you a different price than credit). See why the dealer I quote—and probably many more across the country—might be a little upset? 

Of course, B&H is out of stock on D600 bodies as I write this, so if someone is really desperate for a D600 body their local dealer might be able to unload their D600 inventory at cost. 

Now let's look at things from a well-informed prospective customer viewpoint:

  • Choice 1: a D600 that might or might not have a shutter issue
  • Choice 2: a D610 that fixes the shutter issue (to assume otherwise would also be to assume that Nikon is totally incompetent, in which case see Choice 3 ;~)
  • Choice 3: buy a Canon 6D
  • Rumored Choice 4: Sony and Pentax introducing competitive full frame cameras


At Nikon's current official pricing (list minus US$200 instant rebate), this boils down to a US$100 bet. By taking a D600 over a D610 you get an extra US$100 in your pocket, but you might end up with a camera that needs a shutter replacement. 

Nikon has done nothing to tell you what the odds of your winning or losing that bet are, but has allowed the Internet frenzy to ramp up to the point where most people are thinking that it's likely to be pretty high odds of losing. Is the cost and hassle of sending a camera into Nikon for repair worth the US$100? How about US$200? Maybe US$300? 

Of course, working with a good dealer or a good Internet sales outlet means you should be able to return a D600 with a shutter problem for a new one, but that's still a time hassle at best case (and you still might not win the bet). 

Thus we have dealers who are asking NikonUSA this: can I return my D600 inventory for D610 inventory because you've devalued the D600 enough that it's now an unprofitable product for me? 

Nikon (and Canon) have strong-armed dealers for awhile now. Dealers have been forced to take Coolpix and Powershot inventory in order to get full service on DSLRs. But with the total collapse of compact camera sales, that tactic isn't going to work any more. No dealer I know of wants to take on any new inventory of compact cameras at the moment. Now I'm hearing dealers say they don't want to order a new DSLR.

So I doubt that NikonUSA has solved their problem with the D610. Instead, they have a new problem: dealers won't stock up on D610's until they've unloaded their D600's. 

What's the solution? Likely something along the lines of NikonUSA pulling D600 inventory from dealers and replacing it with D610s, and then selling the D600's in the refurbished queue. Either that or additional price decreases on the D600 along with dealer price protection for those decreases. 

Then there's the person who just bought a D600 in the last week or two. What will they think about the D610's appearance, and if the D600 continues to drop in price as I think it must, what will they think about that

What I fail to understand is Nikon's behavior here. They have done the following by staying quiet about the D600 issues and trying to get around them by doing a sleight of hand with the D610:

  • Eroded key customer confidence
  • Devalued a product by their actions, which leads to:
  • Lowered their product margins
  • Added another lingering inventory problem, which also leads to lower profit margins 


Coupled with all the repair costs that the D600 triggered, how can Nikon's response be the right answer to the problem? In retrospect, the proper solution was to recall all D600's and examine them for defective shutters. If found, replace it and charge the cost of that replacement to their shutter supplier. That kind of response should have:

  • Increased key customer confidence
  • Not devalued the product
  • Lowered their product margins (cost of shipping cameras, inspecting them)
  • Not created a lingering inventory problem or the need for another product


But here's another new problem I'm seeing in my In Box. Consider this quote: "My D600 is coming up on end of warranty. I'm not a heavy user so I'm not sure if my camera has the problem. It seems like it needs more cleaning than I expected. What happens when my warranty expires? Will Nikon still replace my shutter for free if it's defective?"

Nikon is, as usual, will likely remain silent on such questions, which isn't going to increase customer confidence. Basically, I don't think the cycle here has been broken; it's been extended.

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